Create a foundational document that will help you organize and focus on the goals that are most important to you

Striking out on your own and opening your first hair salon is no easy feat. You need to find the right place, gather enough capital, build your menu, and hire skilled stylists. It’s a lot to deal with, especially for someone just starting out. 

That’s why every new hair salon owner needs a business plan. According to the University of Arizona, your salon is 260% more likely to get off the ground and two times more likely to grow if you have a business plan, so writing one should be your first step on your journey to hair salon stardom. 

Every salon is different, and every salon owner will need to write a business plan that takes their own needs into account. Even so, nearly every business plan will contain some or all of the following sections — so follow along and start building your roadmap for success.

These sections belong in your hair salon business plan

Executive summary

Think of the executive summary as your salon’s elevator pitch. Do you want to create a luxurious, high-end experience for premium clients? Or do you want to bring Hollywood glamour to the masses? Explain your vision here through a clear and succinct mission statement.

Your executive summary should be short — one to two paragraphs tops — and provide a top-level overview of what you want your salon to do. It should also include the most critical details about how you plan to achieve those goals, such as your leadership structure, the products and services you offer, how your salon will operate, and where it will be located. 

You may still be working these details out. That’s OK! It might be helpful to write your executive summary after you’ve filled out the rest of your business plan, as the nitty-gritty details give shape to the vision you have for your salon.

Business description

If the executive summary is the bird’s-eye view of what you want your salon to achieve, then the description is where you can dig into the details about what makes you qualified to achieve those goals.

If you’re looking for a place to start building this section out, consider the 5 W’s of Journalism: 

• Who are you? What’s the name of your salon? What is your background in the salon industry? How many years of experience do you have?

• What kind of salon do you plan to open? Do you have a unique concept? What is its business structure — is it a limited liability company (LLC) or a sole proprietorship? 

• Where do you plan to open? Are you starting small, with a single location? Or do you have enough backing to open several locations in multiple cities?

• When do you plan to open? What is your timeline?

• Why are you opening a salon? Are you filling a need that’s missing from your community? Who is your target market?

Be descriptive. Explain your history, how you got from where you were to where you are now, and why the world cannot possibly live without your salon. 

This is also a good place to perform a SWOT analysis. SWOT is an acronym that means “strengths, weaknesses, opportunities, and threats.” It’s a great way to hone in on what makes your salon special and help you figure out potential risks or shortcomings you’ll need to address to maximize success. 

Market analysis

A market analysis shows you understand who your audience is and calls out how you plan to stand out from the competition.

Here, you’ll want to provide a detailed breakdown of who your target clients are, where they live, whether they show a significant demand for the services you plan to provide, and other important demographic information. You’ll also want to include details about who your competitors are and what you can provide that they can’t. 

This information is crucial because it will give you a window into the successes and challenges your salon will likely face. It’ll also give you and any potential investors concrete evidence that you’ve done your homework to back up the business decisions you make.

Products and services

This is likely the part of your business plan you’ve been thinking about the most before opening your salon. What do you plan to offer your clients? Include that information here. 

This section is more than just a list of haircuts and coloring services, though. It’s a detailed breakdown of how much each service will cost your business, including the supplies you’ll need to provide them. When paired with the client cost, you’ll get a much better idea of the profit margin for each service on your menu.

Marketing strategy

This is where you’ll detail how you plan to reach your target audience and retain clients. Do you already have a social media foundation or are you building one from scratch? Are email and SMS marketing important to you? Do you plan to run any promotions? What does your loyalty program look like — or do you even have one? Lay out these details here to guide you as you develop your salon’s marketing infrastructure.

Operations plan

Whether you’re imagining yourself as the ruler of a hair salon empire or starting a worker-owned co-op, you need a plan that clearly explains the structure behind how your salon operates. This won’t just help you figure out how much you’ll pay in taxes every year — it will provide a framework of accountability for employees and management.

Start by explaining your business entity structure. Are you the sole proprietor of your business? Will you be building the business as a partnership? Or is your business going to be an LLC? Whatever you pick, explain the structure and list the people or groups involved who will be responsible for different aspects of the business.

Then, explain how your business will be organized. Who will call the shots? Who do your stylists report to? How many do you plan to bring on board? Are your stylists employees or will you bring them on as independent contractors? Will staff fulfill specific roles (receptionist, stylist, colorist, etc.) or will they handle multiple responsibilities? Giving clear answers to these questions will make operations more transparent and reduce friction should any conflict arise. Consider creating an org chart to help readers visualize the hierarchical relationship between senior management and staff.

Financial plan

Last but not least, you should include any available financial information. This includes startup costs, current capital and loans, available lines of credit, and any other funding sources. 

Your goal here is to prove to potential investors (and yourself) that your salon has a realistic path to profitability. As a result, you should include a breakdown of how your salon aims to generate revenue. List your monthly expenses, projected revenue, and profit margins. Also, include revenue targets and projections for the first few years of operations — these will guide your decision-making processes and let you know whether you need to change course.

With these sections in place, you’ll have a solid foundation you can use to build and grow your hair salon business. Be sure to revisit and revise it over time as your goals grow along with it.